Question :
121.RefertoFigure26-4.If theequilibrium quantity ofloanable funds is$56 billion andif the rateof : 1261820
121.RefertoFigure26-4.If theequilibrium quantity ofloanable funds is$56 billion andif the rateof inflation is5percent,thentheequilibriumnominalinterestrateis
a.11percent.
b.approximately6percent.
c.between6percentand8percent.
d.between11percentand13percent.
122.Foranimaginaryeconomy,whentherealinterestrateis7percent,thequantityofloanablefundsdemandedis$500andthequantityofloanablefundssuppliedis$500.Currently,thenominalinterestrateis9percentandtheinflationrateis4percent.Currently,
a.themarketforloanablefundsisinequilibrium.
b.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillrise.
c.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillfall.
d.thequantityofloanablefundsdemandedexceedsthequantityofloanablefundssupplied,andasaresulttherealinterestratewillrise.
123.Foranimaginaryeconomy,whentherealinterestrateis5percent,thequantityofloanablefundsdemandedis$1,000andthequantityofloanablefundssuppliedis$1,000.Currently,thenominalinterestrateis9percentandtheinflationrateis2percent.Currently,
a.themarketforloanablefundsisinequilibrium.
b.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillrise.
c.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillfall.
d.thequantityofloanablefundsdemandedexceedsthequantityofloanablefundssupplied,andasaresulttherealinterestratewillrise.
124.Foranimaginaryeconomy,whentherealinterestrateis5percent,thequantityofloanablefundsdemandedis$100,000andthequantityofloanablefundssuppliedis$100,000.Currently,thenominalinterestrateis6percentandtheinflationrateis2percent.Currently,
a.themarketforloanablefundsisinequilibrium.
b.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillrise.
c.thequantityofloanablefundssuppliedexceedsthequantityofloanablefundsdemanded,andasaresulttherealinterestratewillfall.
d.thequantityofloanablefundsdemandedexceedsthequantityofloanablefundssupplied,andasaresulttherealinterestratewillrise.
125.Whenthegovernmentgoesfromrunningabalancedbudgettorunningabudgetsurplus,
a.nationalsavingdecreases,theinterestraterises,andtheeconomy’slongrungrowthrateislikelytodecrease.
b.nationalsavingincreases,theinterestratefalls,andtheeconomy’slongrungrowthrateislikelytodecrease.
c.nationalsavingdecreases,theinterestraterises,andtheeconomy’slongrungrowthrateislikelytoincrease.
d.nationalsavingincreases,theinterestratefalls,andtheeconomy’slongrungrowthrateislikelytoincrease.
126.Whichofthefollowingpolicychangeswouldleadtoadecreaseintherealinterestrateandanincreaseininvestmentandsaving?
a.alargerinvestmenttaxcredit
b.anexpansionofeligibilityforIndividualRetirementAccounts
c.anincreaseinincome-taxrates,withnochangeinthegovernmentbudgetdeficitorsurplus
d.anincreaseingovernmentpurchases,withnochangeintaxes
127.Asrealinterestratesfall,firmsdesireto
a.buymorenewequipmentandbuildings.Thisresponsehelpsexplainwhythesupplyofloanablefundsisupwardsloping.
b.buymorenewequipmentandbuildings.Thisresponsehelpsexplainwhythedemandforloanablefundsisdownwardsloping.
c.buylessnewequipmentandbuildings.Thisresponsehelpsexplainwhythesupplyofloanablefundsisupwardsloping.
d.buylessnewequipmentandbuildings.Thisresponsehelpsexplainwhythedemandforloanablefundsisdownwardsloping.
128.Theslopeofthesupplyofloanablefundsisbasedonthelogicthatanincreaseininterestrates
a.makessavingmoreattractive.
b.makessavinglessattractive.
c.makesinvestmentmoreattractive.
d.makesinvestmentlessattractive.
129.Ifthequantityofloanablefundsdemandedexceedsthequantityofloanablefundssupplied,
a.thereisasurplussointerestrateswillrise.
b.thereisasurplussointerestrateswillfall.
c.thereisashortagesointerestrateswillrise.
d.thereisashortagesointerestrateswillfall.
130.Whichofthefollowingcouldexplainadecreaseintheinterestrateandanincreaseintheequilibriumquantityofinvestment?
a.thesupplyofloanablefundsshiftedright.
b.thesupplyofloanablefundsshiftedleft.
c.thedemandforloanablefundsshiftedright.
d.thedemandforloanablefundsshiftedleft.